Y v & X (EOD)

[2003] NSWADTAP 44

Appeal Panel - Internal

CITATION:	Y v V & X (EOD) [2003] NSWADTAP 44
PARTIES:	1 APPELLANT Y RESPONDENT V 2 APPELLANT Y RESPONDENT X 3 APPELLANT Y FIRST RESPONDENT V SECOND RESPONDENT X
FILE NUMBER:	019035, 019036, 029007
HEARING DATES:	30/05/2002
SUBMISSIONS CLOSED:	09/20/2002
DATE OF DECISION:	10/01/2003
DECISION UNDER APPEAL:	V v Y & anor [2000] NSWADT 121 (1/9/2000), X v Y & anor [2000] NSWADT 122 (1/9/2000), V v Y & Anor, X v Y & Anor [2002] NSWADT 7 (5/2/2002)
BEFORE:	Latham M - DCJ (Deputy President); Bitel D - Judicial Member; Greenhill K - Member
CATCHWORDS:	costs - relevant considerations - leave to appeal out of time
MATTER FOR DECISION:	Appeals 1 & 2 Leave to appeal out of time Appeal 3 Principal matter
FILE NUMBER UNDER APPEAL:	19 of 1998, 991030
DATE OF DECISION UNDER APPEAL:	09/01/2000
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Anti-Discrimination Act 1977 Anti-Discrimination Amendment Act 1997 Supreme Court Act 1970 Supreme Court Rules 1970
CASES CITED:	Aldridge v Booth (1988) EOC 92-222 Borg v Commissioner, Department of Corrective Services (2003) NSW ADT 35 Cleary Bros (Bombo) Pty Ltd v Cvetkovski (EOD) [2001] NSWADTAP 10 Gallagher v NSW Police Service [1998] NSWEOT Lupevo Pty Ltd t/a Ampol Nabiac v Bree [2002] NSWADTAP 9 NSW Breeding & Racing v Administrative Decisions Tribunal [2001] NSWSC 494 O’Callaghan v Loder (1984) EOC 92-023 Samuels Real Estate Pty Ltd v Lamb & anor [1998] AILR 32 Shellharbour Golf Club v Wheeler (1999) NSWSC 224 Sivananthan v Commissioner of Police, NSW Police Service (2002) NSW ADT 45 Townsend v Chief Executive State Rail Authority (1999) NSW ACT 104
REPRESENTATION:	APPELLANT K Roser, barrister RESPONDENTS A Healey
ORDERS:	1 Leave to hear the appeals out of time refused; 2 Appeals dismissed

1 On 12 July 2001, the Appellant company filed a Notice of Appeal against two decisions of the Tribunal of 1 September 2000. Those decisions, in each case, found that an employee of the Appellant had sexually harassed the two complainants in the course of their employment with the Appellant, and that the Appellant and the employee were jointly and severally liable for sex discrimination pursuant to ss 24(1)(a), 25(2), 52 and 53 of the Anti Discrimination Act 1977 (the AD Act). Damages in the sum of $16,987:00 and $16,710:00 respectively were awarded to the complainants.

2 The grounds of the appeals against the decisions of 1 September 2000 resolved themselves into essentially two alleged errors by the Tribunal below. Firstly, that the Tribunal had applied the wrong test for determining whether the Appellant was vicariously liable under s 53 of the AD Act ; secondly, that the Tribunal had erred in its application of ss 24 and 25 of the AD Act to the circumstances of the complaints. As will be seen from what follows, these grounds are considered in the course of the Panel’s decision to refuse leave to the Appellant to lodge the appeals out of time.

Whether Leave Should be Granted to Extend the Time Within Which the Appeals May be Made.

3 Section 113(3) of the Administrative Decisions Tribunal Act 1997 (the ADT Act) provides that:-

An appeal must be made :

(a) within 28 days after the Tribunal furnishes the party with written reasons for the appealable decision under s 89, or

(b) within such further time as the Appeal Panel may allow.

4 The Appellant acknowledges in the Notice of Appeal that it received written reasons for the Tribunal’s decisions on 1 September 2000. It follows that the Appellant has lodged appeals which, on their face, are some nine months out of time.

5 The principles which govern the exercise of the discretion to grant leave to hear an appeal lodged outside the time provided by s 113(3) of the ADT Act are set out in Lupevo Pty Ltd t/a Ampol Nabiac v Bree [2002] NSWADTAP 9. In summary, they are:-

- Prima facie, proceedings commenced outside the prescribed period will not be entertained. An extension of time will be granted, however, if it is proper to do so.

- It is relevant whether the Appellant rested on his rights or took action to make the decision-maker aware that the decision was being contested.

- The reason for the failure to lodge the appeal is relevant.

- The length of the delay in lodging the appeal is relevant.

- The nature of the decision below and the consequences of the decision upon the Appellant’s rights are relevant.

- The adequacy of the information conveyed to the Appellant at the time the decision was notified to him, both as to the reasons for the decision and of the Appellant’s entitlement to appeal, is relevant.

- The extent of the Appellant’s knowledge of the relevant statutory provisions is relevant.

- The possible prejudice to the Respondents to the appeal is relevant.

- The merits of the appeal are relevant.

6 In the instant case, the Appellant commenced proceedings for judicial review in the Supreme Court on 29 April 2001, that is, seven months after the Tribunal’s decision was published and provided to it. Justice Barrett heard argument on 6 June 2001 on the question whether judicial review should be refused. His Honour determined on 18 June 2001 that it should be refused, on the basis that the ADT Act provided an adequate appeal mechanism. The Appellant filed this appeal in the Tribunal within the following month, on exactly the same grounds as had been foreshadowed in the application for judicial review in the Supreme Court.

7 Two aspects of Barrett J’s decision deserve mention in the context of this leave application. The first is that His Honour noted that the application before the Supreme Court “involved the calculated decision to resort to the original jurisdiction of the Court instead of an Appeal Panel [that decision having been] made in a fully informed way.” The second is that His Honour observed that “it is … virtually certain that an Appeal Panel would extend time in a case where an appellant had acted promptly and responsibly in pursuing an application for judicial review in the first instance and had, as it were, been sent by the Court to an Appeal Panel.” : NSW Breeding & Racing v Administrative Decisions Tribunal [2001] NSWSC 494. The validity of the latter remark can hardly be doubted, but this is not an instance of prompt and responsible action on the part of the Appellant; seven months elapsed before the Appellant took any step to challenge the Tribunal’s decisions, and when it did, it deliberately chose another avenue of appeal. The parties in this matter have always been legally represented by the same counsel. The Appellant must be taken to have known of its right of appeal under the ADT Act and the potential consequences of any delay in asserting those rights. The reasons for the Tribunal’s decisions of 1 September 2000 are extensive; it cannot be suggested, nor was it suggested, that they failed to inform the Appellant of the bases for the decisions.

8 No explanation was proffered to the Panel for the delay between notification of the Tribunal’s decisions and commencement of proceedings in the Supreme Court. Only the delay (albeit short) between commencement of those proceedings and the filing of the appeal is explained. In those circumstances, the Panel must consider the grant of leave in an appeal effectively lodged six months after the expiration of the time for which s 113(3)(a) provides, where that delay is not explained. In addition, the Respondents to this appeal have been denied the fruits of the Tribunal’s decisions for over a year.

9 One further aspect of the Appellant’s leave application should be addressed. Whilst it formed no part of the oral argument on the hearing of the appeal, the Notice of Appeal sought to rely upon the fact that a decision as to the apportionment of damages and the issue of costs was not delivered by the Tribunal until 5 February 2002, the application having been heard on 19 September 2001. The Appellant in effect argues that the Panel should accept that date as the relevant date for the purposes of determining the leave issue. The fatal flaw in that proposition is that the Appellant demonstrated an intention to appeal the substantive decision well before the hearing to apportion damages and costs, namely on 29 April 2001. This was not a case where a decision as to costs could be said to have “tipped the scales” in favour of an appeal which the Appellant had determined not to pursue for pragmatic commercial reasons (see Cleary Bros (Bombo) Pty Ltd v Cvetkovski (EOD) [2001] NSWADTAP 10).

10 The Panel now turns to a consideration of the merits of the appeal, given that the decisions below represent adverse findings on the issue of the Appellant’s vicarious liability for the conduct of one of its employees.

Section 53 of the Anti Discrimination Act

11 Section 53 provides for the vicarious liability of employers in certain circumstances and, where that liability is established, it provides that it shall be joint and several as between the employer and the employee. In summary, the employer is liable for the discriminatory act of the employee, "unless the employer did not, either before or after the doing of the act, authorise the ... employee, either expressly or by implication, to do the act."

12 The Appellant's submission is that the Tribunal fell into the error identified by James J in Samuels Real Estate Pty Ltd v Lamb & anor [1998] AILR 32, namely that the Tribunal focussed upon the adequacy of the employer's EEO policy, rather than determining whether the employer had expressly or impliedly authorised the doing of the acts in question.

13 The Tribunal dealt with this aspect of its decision in respect of complainant V (no.19 of 1998) at paras 67 to 105 inclusive. In respect of complainant X (991030), the Tribunal observed at para 42 that "the same principles that were applied to determine the liability of the [Appellant] in the matter of the complaint of [V] operate in determining the liability of the [Appellant] in this complaint."

14 What principles did the Tribunal apply in respect of complainant V? Leaving to one side the extensive recitation of the evidence on this issue and the Tribunal's findings, the Tribunal referred to the judgment of Studdert J in Shellharbour Golf Club v Wheeler (1999) NSWSC 224. The Tribunal noted that the term "authorise" in s 53 embraced permission, and that "permission may be inferred from inactivity and indifference where the person sought to be made liable is aware that some particular behaviour may occur." (per Studdert J) The Tribunal was of the view that permission may equally be inferred from inactivity and indifference before or after the discriminatory conduct occurred (see paras 83 and 84). In that regard, the Appellant also takes issue with reliance by the Tribunal upon evidence of inactivity and indifference, which was conduct outside the period of the complainants' employment. In effect, the Appellant's contention is that this evidence was irrelevant, in each case, for the purposes of s 53.

15 It is appropriate that the Panel deal with this latter argument before returning to the Tribunal’s treatment of vicarious liability. The Tribunal canvassed the evidence on the topic of the Appellant’s response to the complaints (it having been accepted that the company directors, Mr and Mrs Y, did not become aware of the complaints until after the respective complainants had effectively left their employment) at paras 75 to 81 of the decision with respect to V, and at paras 44 to 47 of the decision with respect to X. The evidence with respect to both matters is summarised at para 93 of the former decision in these terms:-

“These complaints could not be resolved by severe talking to [the perpetrator]. They required delicate and sympathetic contact with [V] and her husband, and with [X], at least initially to ascertain what could be done to assist them to overcome their experiences. Mr [Y] did not elect this course but took an approach of making cursory enquiries of the perpetrator of the allegations by [V] and some staff members and to ignore the harder evidence of corroboration of [V]’s allegation. To do otherwise would open up for Mr [Y] the prospect of disturbing the good working relationship with [the wife of the perpetrator] and the possibility of being faced … with a claim by her for wrongful dismissal. Mr [Y] hoped that the complaint would go away.”

16 The Panel is not here concerned with these findings of fact, which were clearly open to the Tribunal. The proposition that this conduct, or rather the lack of a meaningful response to the allegations after the complainants had left their employ, cannot be relevant for the purposes of inferring permission is one which the Panel rejects. Firstly, the clear terms of s 53(1) envisage that authorisation can occur either before or after the discriminatory act. Secondly, the Appellant’s contention assumes that the relevance of the employer’s conduct, after the discriminatory act, resides in the continued existence of the employment relationship between the employer and the complainants. If that were so, it would produce an anomalous result, namely, that the relevance of an employer’s conduct after the discriminatory act would depend entirely upon the individual complainant’s decision to resign, or continue working alongside a perpetrator about whom he/she had complained. As a matter of public policy, that cannot be so.

17 Returning then to the primary submission, it does not appear to the Panel that there was any misapplication of the principles established by Shellharbour Golf Club v Wheeler. The decision in Samuels Real Estate should be placed in its proper context. There James J was dealing with a finding of discrimination on the ground of race. It was no part of that decision that the employer of the employee who had contravened the Act was on notice of the employee’s discriminatory behaviour. The instant matter falls into a different category. The directors of the Appellant company were on notice of the employee’s discriminatory conduct towards female members of staff, in that it was acknowledged that in January 1996 (one month before the discriminatory acts towards complainant V and two months before the discriminatory conduct towards complainant Y) the same employee was the subject of a complaint of a like nature from a waitress employed by the Appellant. On that occasion the employee was reprimanded. It was in that context that the Tribunal referred to the fact that the Appellant’s EEO policy was not published to the staff (indeed, it was placed in a safe) and, in the event of a failure on the part of the manager to implement the policy, there was no system which allowed the staff to contact the directors (paras 88 – 91). As far as the staff were concerned, there was no EEO policy. More importantly, it was in that context that the Tribunal determined that the Appellant had not discharged its onus of establishing that it had not authorised the employee’s discriminatory acts “either before or after” the impugned conduct (para 50 of the decision re complainant X; para 94 of the decision re complainant Y).

18 In the view of the Panel, the Tribunal was entitled to observe that whatever policy the Appellant had adopted, it had not put it into effect. That observation does not, in the opinion of the Panel, betray a misplaced focus. It was, in any event, relevant to another submission made to the Tribunal by the Appellant and repeated on this appeal, namely, that the Appellant had taken all reasonable steps to prevent discrimination. That brings the Panel to a consideration of a further submission, namely that the Tribunal ought to have had regard to s 53(3) of the Anti Discrimination Act.

19 Section 53(3) of the Anti Discrimination Act now provides a “defence” to the vicarious liability of an employer who satisfies a Tribunal that all reasonable steps were taken by the employer to prevent an employee from contravening the Act. That section commenced on 4 July 1997 (Anti Discrimination Amendment Act 1997, No 9), well after the discriminatory acts of the employee against the complainants in 1996. Affecting as it did the rights and liabilities of employers, it was subject to the presumption against retrospectivity. Hence, it was not available to the Appellant for the purposes of the proceedings before the Tribunal.

20 If we are wrong in this regard, it is clear from the Tribunal’s consideration of the evidence referred to above at para that the “defence” under s 53(3) would not have been made out.

Sections 24 and 25 of the Anti Discrimination Act

21 The Tribunal set out ss24 and 25 at para 52 of the decision and we do not repeat them here. Section 24(1)(a) relevantly defines discrimination on the ground of sex. Section 25(2)(a) provides that it is unlawful for an employer to discriminate against an employee on the ground of sex in the terms or conditions of employment.

22 The process of reasoning which ultimately lead the Tribunal to find liability in the Appellant may be summarised thus:-

- The Appellant’s employee treated the complainants less favourably than he would treat a male person in the same circumstances, and therefore contravened s 24(1).

- The Appellant was deemed to have discriminated against the complainants pursuant to s 53, that is, the Appellant did not discharge its onus of satisfying the Tribunal that its directors did not authorise the discriminatory conduct of its employee.

- The Appellant was therefore in breach of s 25(2)(a).

23 The Appellant’s submission on this ground of appeal relies upon the fact that the manager’s conduct towards the complainants occurred prior to the introduction of ss 22A and 22B into the Anti Discrimination Act. Those provisions created separate heads of complaint by employees against other employees on the grounds of sexual harassment. The contention was that, in effect, the Tribunal had wrongly attributed liability to the Appellant by characterising the employee’s conduct towards the complainants as discrimination on the ground of sex, rather than sexual harassment. If it was in fact the latter, so the argument went, then there was no discrimination on the ground of sex and no discrimination on that ground in the conditions of employment. In other words, the submission depends upon there being a relevant distinction at law between acts of sex discrimination and sexual harassment.

24 This argument completely ignores a long line of authority which established that sexual harassment of the type engaged in by the Appellant’s employee (whose conduct towards the complainants was not in dispute) was capable of meeting the requirements of s 24, well before the introduction of Part 2A of the Act (see O’Callaghan v Loder (1984) EOC 92-023; Aldridge v Booth (1988) EOC 92-222). The Panel rejects the proposition that sexual harassment and acts of discrimination on the ground of sex are mutually exclusive. Indeed, in the course of the decisions, the Tribunal refers to the “harassment” of the complainants by the Appellant’s employee in terms which clearly equate that conduct with “treatment” for the purposes of s 24(1). The Tribunal was entirely correct in approaching the matter in that way.

25 In summary, the Panel is not persuaded that an appeal against the Tribunal’s decisions would have sufficient merit to warrant setting them aside. Having regard to all the factors relevant to the grant of leave, the Panel declines to exercise its discretion to grant leave to allow the appeal to be made out of time.

Costs

26 The Appellant lodged its appeal against the decision of the Tribunal on 5 February 2002, with respect to costs and the apportionment of damages, on 5 March 2002. That appeal is within time and is not the subject of the discretion to grant leave.

27 As noted above, on 1 September 2000, the Administrative Decisions Tribunal, sitting in the Equal Opportunity Division, found the complaints of sexual harassment made by V and X substantiated against both Y (the First Respondent and the Appellant) and its employee (the Second Respondent). Orders were made for the payment of compensation and it was noted that the liability of the then First and Second Respondents was joint and several. Order 6 provided that if no agreement could be reached as to costs within 21 days, the parties were at liberty to apply to the Registry to fix a date for the hearing of the application by the Tribunal to determine the question of those costs.

28 The complainants’ solicitors wrote to the solicitors for the First Respondent in an effort to settle the costs issue and avoid further costs being expended (see letter of 15 September 2000 tendered to the Tribunal on the costs application on 19 September 2001). There was no reply to that letter. The complainants' solicitors then made application to the Registry for a hearing date to determine the question of costs. Following the commencement of Supreme Court proceedings by the Appellant, the Registry advised by letter dated 10 October 2000 that it was the view of the Judicial Member of the Tribunal that it would not be appropriate to consider the costs issue until that appeal was finalised.

29 Following further correspondence with the Tribunal after the conclusion of the Supreme Court proceedings, the Registry advised by letter dated 7 August 2001, that the matters had been listed for hearing in relation to costs on 19 September 2001.

30 Although the Appellant’s submissions dated 3 October 2001 say that by letter dated July 9, 2001, the Appellant applied to the Tribunal for it to "assess the respective contributions to be made between the respondents…", the complainants’ solicitors stated that no notice was given of that application. At the hearing on 19 September 2001 submissions were made by the complainants in relation to the costs applications.

31 The Tribunal's decision on the application for costs contribution and costs is dated 5 February 2002. For the purpose of this decision, the Tribunal's reasoning and findings may be summarized as follows:- the terms of section 53(1) and (2) of the Anti-Discrimination Act 1977 are sufficiently broad to encompass liability under the Act, both for the discriminatory conduct and for any ancillary liability for costs relating to the determination of the discriminatory conduct and of the proceedings associated with those determinations (para 30) ; the Tribunal considered that it was justified in exercising its discretion to award costs in an applicant's favour where the combined effect of the costs incurred in presenting the claims of discrimination and in opposing the defences raised against those claims, would result in the amount of damages awarded being seriously eroded or overridden completely by the amount of costs incurred by the applicant (para 36).

32 The orders made in that decision were that the Respondents be jointly and severally liable to each applicant for the costs on a party/party basis, and that the amount of the costs be agreed between the parties within sixty (60) days of the making of these orders. If the parties were unable to agree upon the amount of costs within the period of 60 days, costs were to be assessed pursuant to the Legal Profession Act 1987.

33 The Appellant in amended reasons for appeal argued that :-

(i) The Tribunal erred in law in declaring the First Respondent jointly and severally liable for the Applicant's costs of the proceedings.

(ii) The Tribunal's discretion as to costs miscarried for the following reasons :-

The Tribunal (at para. 34 of the costs determination) asserted that: "The proceedings on 24 September 1999 were intended to cover both an application for the joinder of the Second Respondent as a party to the proceedings, and to proceed on that day and on the following day with the hearing of the inquiries." The transcript of the proceedings on that day reveals that neither the judicial member nor Ms Healey was available on the following day.

The Tribunal was in error as to the timing of the joinder of the Second Respondent as a party: that had occurred in March 1998. The procedural question still requiring to be determined by the Tribunal on September 24, 1999 was thus whether the two inquiries be conducted jointly.

The Tribunal failed to consider, in its decision about the costs of the proceedings on 24 September 1999, the fact that the Second Respondent had not, at that stage, been properly served with important material, including the Points of Claim, in the applicant V’s case. That problem remained undetected and uncorrected until raised by the First Respondent on February 23, 2000 when the Tribunal made appropriate directions to ensure proper service. In refusing to award the applicants their costs of that day the Tribunal said: (at para. 35(b) of the costs determination) "The Tribunal considers that the Applicant (sic) should bear some responsibility for the loss of the first day's hearing as the Applicant had a responsibility to ensure that the Second Respondent was aware of the hearing dates." The same observation could and should have been made about the proceedings of 24 September 1999 with the same consequence as to costs.

The Tribunal (at para 35(a) of the costs determination) found that "the amount of damages awarded to the Applicants will be seriously eroded by the costs suffered by the Applicants in establishing their complaints" without any evidence or other proper basis upon which to make such a finding.

The Tribunal (at para 35(c) of the costs determination) wrongly considered that the First Respondent had "strenuously defended the claim that it was liable for any discriminatory conduct of the Second Respondent to the Applicants" and that "a large proportion of the time taken at the hearing related to the detailed examination and cross-examination of these witnesses." However at the commencement of the hearing on September 24, 1999 counsel for the applicants estimated and advised the Tribunal that a fully contested hearing could take 5 days (Transcript 24/09/99 at p.7 line 54). That estimate was also based on there being no expert medial evidence for the First Respondent and no cross-examination of the claimants' experts ( Transcript 24/09/99 at p.8 line 3)

The Tribunal (at para 35(d) of the costs determination) considered that the medical evidence which the First Respondent had called "took up a not inconsiderable proportion of the time of the hearings". However, the Tribunal on September 24, 1999 effectively encouraged the First Respondent to obtain independent medical evidence and hinted that if the Applicants did not make themselves available for medical assessment or maintained unreasonable pre-conditions for doing so, the Tribunal may, in its discretion, place little weight on the Applicants' medical evidence.

The Tribunal (at para 35(e) of the costs determination) wrongly considered that the First Respondent had not established "a further defence…related to…Section 53…" and that "an amount of time associated with evidence to support this defence was taken at the hearing." The First Respondent was entitled to raise this statutory defence and could not legitimately be penalized in costs for doing so.

The Tribunal erred (at paragraph 37(3) of the costs determination) when it held that the Applicant had been successful in "both applications made before the Tribunal on 19 September 2001" because:

The First Respondent's application to the Tribunal to "assess the respective contributions" was necessary and appropriate given that that offer had, without notice during the hearing, been made to both Respondents by the Tribunal and required clarification;

The issue did not involve the Applicants and ought not to have involved them in any submissions or expense.

(iii) The Tribunal erred in law in failing to give proper reasons for its decision on the issue of the contribution between the respondents. The First Respondent had a legitimate expectation that the Tribunal would explain:-
What it had in mind when it provided that the Respondents could apply to it for it to "assess the respective contributions to be made between the respondents" and ;

What order/s the Tribunal would have made in the event that it concluded it did have power to assess contributions.

34 In reply, the Respondent submitted that there is no error of law demonstrated in the Tribunal's discretionary decision in relation to costs. This decision, it was said, can be easily distinguished from the Appeal Panel's decision in Cleary Bros (Bombo) Pty Ltd v Cvetkovski [2001] NSWADTAP 10, where it was held that the discretion was not exercised judicially on the basis that, according to Appeal Panel, the Tribunal’s view of the settlement negotiations prior to hearing was unreasonable and not supported by evidence. It was submitted in the alternative, that if the Tribunal erred, in the circumstances, it would not be appropriate to set aside the costs order and order that each party pay its own costs, and the preferable course would be to remit the matter back to the Tribunal for its reconsideration. It was pointed out that the Respondents to the appeal are legally aided, and there should be no issue that if costs are not awarded for the appeal, costs incurred will be sought by the Legal Aid Commission from any damages that are awarded.

35 The Appellant made further submissions in writing filed on 20 September 2002. These have been taken into account.

36 In civil litigation in the courts, costs usually follow the event; the unsuccessful party is usually ordered to pay the costs of the successful party, unless there are circumstances which justify some other order (see B Cairns, Australian Civil Procedure (4th ed), LBC Information Services: Sydney, 1996 at pp 610-611). Whilst the courts are given general discretionary powers in relation to costs (see eg. s76 Supreme Court Act 1970), court rules generally direct that costs should follow the event, unless there are good reasons to depart from the costs indemnity rule (see eg Part 52A rule 11 of the Supreme Court Rules 1970). There is no such rule in this Tribunal. Section 114 of the Anti-Discrimination Act 1977 provides:

114 Costs

(1) Except as provided by section 111(2) and subsection (2) each party to an enquiry shall pay his or her own costs.

(2) Where the Tribunal is of the opinion in a particular case that there are circumstances that justify it doing so, it may make such order as to costs and security for costs, whether by way of interim order or otherwise, as it thinks fit.

37 Section 88 of the ADT Act 1997 provides:-

(1) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in elation to proceedings before it, but only if it is satisfied that there are special circumstances warranting an award of costs.

(2) The Tribunal may:

(a) determine by whom and to what extent costs are to be paid, and

(b) order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on any other basis.

(3) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs.

(4) In this section, costs includes:

(a) costs of or incidental to proceedings in the Tribunal, and

(b) the costs of or incidental to the proceedings giving rise to the application, as well as the costs of or incidental to the application.

38 The relationship between the two Acts was considered by President O'Connor DCJ in Townsend v Chief Executive State Rail Authority (1999) NSW ACT 104, paras 8 to 16. At para 13 he states:-

Situations could arise where the enactment conferring jurisdiction expressly set a different standard for the award of the costs to that contained in the primary rule found in s 88(1). In such a situation I consider that the provision in the enactment conferring jurisdiction would be accorded priority. That is the case for example in relation to the jurisdiction exercised by the Equal Opportunity Division of the Tribunal pursuant to the Anti-Discrimination Act 1977.

39 A recent consideration of Section 114 appears in Borg –v- Commissioner, Department of Corrective Services (2003) NSW ADT 35. The Tribunal there noted:-

The general rule concerning costs, set out in s114(1) of the AD Act, provides that each party to an inquiry shall pay his or her own costs. However, s114(2) empowers the Tribunal to make "such order as to costs…as it thinks fit" where it "is of the opinion in a particular case that there are circumstances that justify it doing so”.

As was observed by the Appeal Panel in Cleary Bros (Bombo) Pty Ltd –v- Cvetkovski (EOD) [2001] NSWADTAP 10 at paras 63-65, s114 of the AD Act does not prescribe a test to be applied. Rather the section creates a presumption in subsection (1) and a discretion in subsection (2). This discretion must be exercised judicially, and no authority or rule can determine whether in any particular case an order should be made: Gallagher v NSW Police Service [1998] NSWEOT, 30 September 1998.

The Appeal Panel in Cleary at para 67 agreed with the Tribunal in Gallagher that in order to justify the making of an award of costs "there has to be something over and beyond a normal course of circumstances". The Panel then went on to say:-

This should be understood to mean nothing other than that the presumption in section 114(1) 'must yield' when in a particular case there are circumstances justifying the making of a costs order ( Penfold v Penfold (1980) 144 CLR 311 at page 315). To similar effect, there may be in a particular case 'circumstances which justify the departure from the general rule' ( Australian Postal Commission v Dao & Anor (No 2) (1986) 6NSWLR 497 at 505).
It follows from the above that previous cases concerning costs applications under s114(2) can only provide an indication of the kinds of circumstances that may attract a costs order. They cannot provide a comprehensive guide as to the circumstances in which costs awards will necessarily be made.

An examination of previous cases where costs have been awarded in favour of an applicant suggests that as a general proposition, a combination of circumstances is required in order to justify an award of costs. See, for example, Russell v The Commissioner of Police, NSW Police Service and Others [2002] (No.2) NSWADT 252; Peck v Commissioner of Corrective Services (No. 2) [2002] NSWADT 244; Gallagher; V v Y & Anor; X v Y & Anor [2002] NSWADT 7; Duggan v Shore Inn Pty Limited (1993) EOC 92-483; Willis v State Rail Authority of New South Wales (No. 3) (1992) EOC 92-456; Holdaway v Qantas Airways Limited (1992) EOC 92-430; Squires v Qantas Airways Ltd (1985) EOC 92-135 - see also the Appeal Panel's remarks in Cleary at paras 86-87.

In combination with other factors, the kinds of circumstances which have been regarded in previous cases as justifying the making of a costs' award include:-

*Whether the applicant's costs exceed or are disproportionate to the amount of damages awarded ( Russell; Peck; V v Y & Anor; X v Y & Anor; Duggan, Willis, Holdaway; cf Nowlands v TNT Skypak & Anor (1994) EOC 92-560).

*The manner in which the parties have conducted the proceedings (Russell; peck; V v Y & Anor; X v Y & Anor; Duggan, Holdaway).

*Whether the case raises any important public policy or public interest considerations (Willis; Holdaway).

*Whether the proceedings determine or clarify an important question of law (Russell; Squires).

The circumstances listed above appear to reflect an overall concern that the substantial rights and protections conferred by the AD Act should not be undermined by the cost of vindicating them. (See, for example, Gallagher; Duggan) The list is not intended, however, to be an exhaustive account of the kinds of circumstances which may be considered relevant to a costs' award.

40 In Borg, the grounds argued in support of an award of costs were that the case involved a matter of public importance, the amount of the Appellant's legal costs would exceed her total damages, the Respondent's defences lacked any real prospects of success from the outset, the case was lengthy and complex, and there was nothing warranting criticism in the way the Appellant conducted her case.

41 It is noted that the Tribunal in the decision, the subject of this appeal, relied on the decision in Cleary Bros referred to in Borg.

42 In Sivananthan v Commissioner of Police, NSW Police Service (2002) NSW ADT 45, the Tribunal noted at paras 24 & 25, “the issue of costs in relation to the victimization complaints is governed by s114 of the Act. Section 114(1) creates a ‘usual rule’, or starting proposition, in relation to costs. Except as provided by s111(2) and s114(2), ‘each party to an inquiry shall pay his or her own costs’. Section 114(2) permits the Tribunal to depart from that usual rule when it is ‘of the opinion that there are circumstances which may justify a departure from the general rule’ and an Appeal Panel recently noted in Cvetkovski that ‘no authority or rule can determine whether in any particular case an order should be made (at para 71).’”

43 Ultimately, the issue of costs is one to be decided by a Tribunal having regard to the facts of the case as determined, the legal principles enunciated above, and the Tribunal's assessment of the appropriate way to exercise its discretion having regard to these factors and principles. It is not the role of the Panel to traverse the findings of the Tribunal with respect to the conduct of the proceedings before it, or the likelihood that the damages awarded to the complainants would be exhausted by legal costs. The jurisdictional limit on damages has been the subject of adverse comment in a number of cases in the Tribunal (see Gallagher v NSW Police Service [1998] NSWEOT) and in reviews of the operation of the AD Act, such as that carried out by the NSW Law Reform Commission in 1999 (Report no. 92). The amount of legal costs incurred in pursuing any claim of discrimination is considerable and does not need to be established by evidence, before a Tribunal may take it into account. Unless an error in the exercise of the Tribunal’s discretion can be made out, the Panel is of the view that the original decision must stand. This is not a case where the Appellant has been able to identify to the satisfaction of the Panel that the Tribunal made such an error. The Tribunal’s decision was made after an extended hearing and in the light of its opportunity to hear from the Applicants (in each case) and the Appellant. The law expressed by the Tribunal in para 30 of its decision on costs is correct.

44 It has not been demonstrated that the Tribunal’s discretion miscarried, in that the Tribunal took an irrelevant consideration into account, or failed to take a relevant matter into account, or acted on a wrong principle. Accordingly, the appeal against the Tribunal’s order as to costs is also dismissed.

45 Turning to the question of costs on the appeal, it is also governed by s 114 of the AD Act. The Respondents to this appeal submit that there are circumstances which justify a departure from the general rule that each party should bear their own costs, namely, that the Appellant has unjustifiably brought this appeal out of time, thereby disturbing the legitimate expectations of the complainants to the fruits of a victory won long ago. Whilst there is merit in that submission, it remains true that the Appellant was entitled as of right to the hearing of an appeal on the question of costs. The appeal hearing itself was relatively brief and confined to matters of law. In these circumstances, the Panel is not persuaded that the general rule ought be disturbed and declines to make any order as to costs on the appeal.